According to a new report released by the International Energy Agency (IEA), the longer the delay on real action on carbon emissions, the more the costs of transforming the energy sector will increase.
The IEA states that every year of delay adds approximately $500 billion to the global incremental investment cost of $10.5 trillion needed for the period 2010-2030.
Continuing delays of just a few years would likely render that goal completely out of reach.
The IEA’s World Energy Outlook 2009 (WEO-2009) details the energy challenge facing humanity and what is needed to overcome it.
The IEA says that in late 2008 and early 2009, investment in renewable energy fell proportionately more than that in other types of generating capacity and for 2009 as a whole, it could drop by close to one-fifth.
A prolonged downturn in investment threatens capacity growth in the medium term, particularly for long lead-time projects, eventually risking a shortfall in supply.
The capital required to meet projected energy demand through to 2030 globally, amounts in cumulative terms to US $26 trillion in year-2008 dollars. Continuing with the current approach to energy would see a rapidly increasing dependence on fossil fuels, with alarming consequences for climate change and energy security.
While parts of Southeast Asia have relatively abundant sources of renewable energy, various physical and economic factors have left much of it untapped says the IEA. A total of $1.1 trillion needs to be invested in energy infrastructure in the ASEAN region in 2008-2030 in the IEA’s Reference Scenario, more than half in the power sector. In the organisation’s 450 Scenario, total investment needs are $390 billion higher.
IEA’s Reference Scenario provides a baseline picture of how global energy markets would evolve if governments make no changes to their existing policies. The 450 Scenario envisions a world in which action is taken to limit the long-term concentration of greenhouse gases in the atmosphere to 450 parts per million of CO2-equivalent. However, even this goal is said by many experts to doom the planet to catastrophic and irreversible climate change.
